Home Daily Blitz Does the Record-Setting Stock Rally Have Legs?
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Does the Record-Setting Stock Rally Have Legs?

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barrons articleThe following is an excerpt from JOHN KIMELMAN | August 15, 2016 | Barrons.com |

The weather in New York is unusually hot for the middle of August. So is the stock market.

On Monday, the three major U.S. stock indexes – the Dow Industrials, the Standard & Poor’s 500 and the Nasdaq – have reached another set of all-time highs.

And the financial media is buzzing with stories about whether this somewhat surprising rally in the face of slow economic growth still has legs.

Writing in USA Today, investment columnist Adam Shell argues that market fear, as measured by the Chicago Board Options Exchange’s Volality Index (ticker: VIX ), is “nowhere in sight,” despite bearish comments about the stock market made by the likes of Carl Icahn, Jeff Gundlach, and Bill Gross. The VIX closed today at 11.8, its 52-week low.

“Low fear levels most often occur at times of rising stock prices and tranquil markets,” writes Shell. “But low VIX readings are often viewed as a sign of investor complacency as risks build.”

While FDR once famously told Americans that “the only thing we have to fear is fear itself,” Shell quotes Greg Rutherford, the CEO of Cavalier Investments, who altered the famous quote to make it applicable to the dangers of a complacent stock market: “The only thing we have to fear is the lack of fear.”

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